Baku, Azerbaijan, March 10
By Anvar Mammadov - Trend:
The Azerbaijani AccessBank will be able to utilize support from international financial institutions' (IFI) shareholders, according to the message of the international ratings agency Fitch Ratings published on its website March 10.
The support considerations take into account the IFIs' strategic commitment to microfinance lending in developing markets, the IFIs' direct ownership of the AccessBank, stemming from their participation as founding shareholders and Fitch's expectation that a full exit of the IFIs from the bank in the next few years is unlikely, the message read.
The agency has downgraded the Long-term IDR of Azerbaijan's AccessBank (AB) to 'BB+' from 'BBB-'. The agency also downgraded short-term IDR of the bank to 'B' from 'F3'.
Viability rating of the bank has been affirmed at 'bb-' and support rating has been downgraded to '3' from '2', according to the agency.
The affirmation of AB's Viability rating of 'bb-' reflects the bank's still solid intrinsic creditworthiness, its adequate asset quality, driven by robust underwriting standards and risk controls, comfortable capital position and the sound quality of management, according to Fitch.
In late 2015, AB's loans 30 days overdue surged to 7.4 percent of gross loans from 0.8 percent as of late 2014. Restructured loans also increased sharply to 28 percent from 0.5 percent as of late 2014.
According to management, most of the restructured loans are FX-denominated loans, where AB has extended maturities and reduced interest rates so that monthly installments for borrowers in manat terms are unchanged following the devaluation, Fitch said in the message.